Not Much Govt Can Do

At a time when fuel prices have gone through the roof and motorists are waiting for the Government to implement timely and effective relief measures, the bad news is that there is little the State can do.

Prime Minister Nahas Angula yesterday said a study by a committee that looked into how the Government could provide relief to Namibians on the biting food and fuel prices has shown that chances are slim for Government to employ any measures.

“The study shows that for fuel, the Go-vernment has limited power – it is quite a challenging situation,” the Premier said.

Angula added that fuel is a commodity that is controlled on the international market and that renders non-oil producing countries li-mited powers to control the prices.

Permanent Secretary in the Ministry of Mines and Energy, Joseph Iita, admitted that the Government cannot effect any relief measures espe-
cially since the trend is experienced at global level.

“We will continue to suffer for some time,” he warned.
But for economist and First National Bank Senior Manager for Research and Development, Daniel Motinga, policy makers can, in the interim, provide some relief in the form of using the energy fund to cushion motorists, particularly on diesel.

He added, this should be a temporary measure only to help absorb the fuel price shock and se-condary price pressure.

“A key benefit of such a subsidy/cushion would be to help ease producer prices (that are driven in part by transport costs) and thereby provide relief to local consumers,” he said.

Motinga also stated that historically, Go-vernment used the Energy Stabilisation Fund to provide subsidies to vehicle owners although later, the fund went into a major deficit.

Meanwhile, Namibians will have to be patient regarding the implementation of relief measures on high food prices. Government will only announce the measures next week, the Prime Minister said.

Head of State Hifikepunye Pohamba at the closure of the Cabinet retreat at Walvis Bay last month directed the Office of the Prime Minister to appoint a committee that would conduct a survey to assess the effects of increasing food and fuel prices.

The committee conducted a two-week survey and recommendations on what measures the Government could implement have been submitted to the President.

The food crisis remains a global trend. The main attribute for the crisis is climate change, high fuel prices and bio-fuel production.

In Namibia, delayed rains worsened the situation in most northern parts of the country this year. The delay resulted in unfavourable crop growing conditions that saw the reduction of yield prospects by at least 40 percent.

The heavy rains received since early this year also caused water- logging and leaching, which had negative effects on seed germination. The conditions further stunted the growth of main food crops, namely maize and mahangu.
Farmers in communal areas in northern Namibia reduced the area under cultivation by 50 percent as a result of wet fields and unavailability of draught animals.